Tax relief request denied

COEUR d'ALENE - Ken Howard made another stand for property tax relief at Wednesday's meeting of the North Idaho College Board of Trustees.

His request was shot down again.

Howard asked his fellow board members to reconsider their May decision to raise property taxes by 2 percent, since the college has since received $1.8 million in unanticipated revenue from the state.

"Every day that I pick up the paper I see another taxing entity that has found it necessary to raise taxes to meet their needs, whether it's a school district or a highway district or some other taxing entity," Howard said. "Those add up for the people who have to pay taxes, and we are in a position this year, I believe, with the $1.8 million to say to the taxpayers of this county, 'We don't need the money this year.'"

In May, NIC trustees approved a $40.8 million general operating budget for the 2011-12 fiscal year. The budget includes a $3.2 million increase in expenses, with a 2 percent property tax increase and a 4 percent student tuition hike to raise revenue to help fill the gap.

During the May budget discussion, Howard asked the trustees to consider reducing the tax levy increase from 2 percent to a 1 percent increase, and gave reasons similar to those he gave Wednesday. That motion failed by a vote of 3-2, with Ron Vieselmeyer casting the other affirmative vote.

"We are at 11.7 percent unemployment in this county now ... and this is during our season of high employment with the tourists. What's going to happen when the tourists are gone?" Howard said Wednesday. "We've seen seniors without any raises in their Social Security in three years."

Howard said he brought the motion forward at the August meeting because the tax increase must be filed with the county by Sept. 8.

The funds generated by the 2 percent increase will not be lost if trustees choose not to collect them now, he said.

"We can go back and recapture unused taxes. We've done it in the past, and I know it's a painful process," Howard said.

Taxing districts in Idaho can levy 3 percent of their budget each year. Any taxing authority unused, can be exercised later through the collection of foregone taxes.

Howard's motion failed by a vote of 3-2. Trustee Ron Vieselmeyer voted with Howard in favor of reopening the budget to reduce the tax levy.

Before voting to oppose the motion, trustees Christie Wood, Judy Meyer and Mic Armon shared their concerns about the suggestion.

"I would like to remind my entire fellow board that all of us, all five of us, take these things into account when we have our budget discussion which we had over a period of several months," Wood said. "All of us think about the needs of our constituents before we make a decision, and all of us struggled when we got to the decision that we made. We did so based on a value judgment of what the needs are of the college, what the needs are of the community and what we thought the community could afford."

Regarding the future use of foregone taxing authority, Wood said she doesn't want the board "to get in the habit of trying to build a future based on foregone."

Meyer asked how they would provide relief for students who are paying 4 percent more for tuition.

The college expected to receive an additional $591,000 in property taxes for the year. That included $258,000 from the 2 percent tax hike and another $333,000 from new construction coming onto the tax rolls.

The amount the college will receive for new property construction came in at $141,000 less than the college estimated.

Ron Dorn, the college's vice president of resource management, said during the meeting that without funds generated by the 2 percent tax increase, there would be a roughly $400,000 hole in the budget.

Board Chair Mic Armon said the trustees raised tuition and property taxes because they have heard from local legislators that state funding for education is going to continue to decrease, and that education institutions should be looking for other ways to generate revenue.

Wood and Armon said they were concerned about applying any part of the $1.8 million in one-time funds to pay for ongoing expenses in the college's general operating fund.

The 2 percent property tax increase will remain in the budget and become part of the college's base budget each year thereafter. It is estimated that it will raise property taxes for the owner of a $200,000 home, after all exemptions are applied, by $2.91 per year.